High Executive Salaries

Turkish executives take home one of the highest real pay levels worldwide, surpassing their American counterparts among many others, according to an annual report by the Hay Group, a global management consulting firm.

Turkey ranks fifth on the list of managers' spending power, according to the World Pay Report. When compared, a Turkish executive brings home $1.90 to every $1 of an American executive.
“The ranking appears striking at first glance, however, the survey results in Turkey within the last six to seven years have revealed this uptrend,” said Ayşın Argüden, of Hay Group Turkey. “The research is based on 621 professionals working in 132 medium and large scale private sector firms in Turkey.”

The World Pay Report examines the average salary of a management-level employee – Hay Reference Level 20. It is roughly equivalent to a head of department or function in a large multinational company. The report applies the relevant tax rate for that salary and subtracts a generic “cost of living” measure to reach a ranking of the relative spending power of managers in 51 countries around the world.

Managers in the fast-growth economies of the Middle East, Asia, and Eastern Europe tend to have the highest spending capacity, according to the report. The demand for management talent far outstrips supply in these markets, meaning companies need to compete with developed economies for the talent they need. At the same time, the cost of living is determined more by local factors, keeping the relative value of management salaries high. (more)

Maybe I should consider moving back to Turkey!! Considering that US is printing money faster than Zimbabwe, it may not be a bad move.

Q2 Growth Rates

Turkish economy grew by a dismal 1.9% in Q2 of 2008. Q1 growth rate revised up to 6.7%, hence the GDP growth rate in the first half of 2008 was 4.2%.

This is the result of AK Party's idiotic actions as much as it is the result of global developments. They were the ones who were taking credit when the economy was growing at high rates, now they should own up to their failure. The picture will probably get better during the second half compared to Q2, and 2008 growth rate will be around 4%. This might be a good number for a developed economy but this is no panacea for Turkey's high unemployment problem.

Turkish Inflation Peaks

It seems like Turkish CPI peaked in July at 12.1% and went down to 11.8% in August. In the next three months it is very likely that inflation rate will go below 10% and stay in single digits in 2009. The sharp decline is supporting the decline in inflation rates. Last year in September m-o-m CPI was 1%, in October it was 1.8%, and in November it was 2%. This year, we might experience a higher inflation in September because of Ramadan effect, but I don't think it is very likely.

I mentioned at Ekonomi Turk in July that oil prices will decline towards the $100 mark. I don't think we will see a significant increase in oil prices for the remainder of the year. Thus, it is now very likely that we will see single digit inflation rates at the end of the year.